Oliver Lane vs. George L. Borland, 14 Me. 77

After a continuance, nisi, the opinion of the Court was drawn up by Weston C. J. The evidence of the contract between the plaintiff and Washburn fy Fling, is to be found in the paper given by him to them, of the fourth of January, 1834, and in that given by them to him of the same date. They both relate to the same transaction, executed at the same time, and are to- have the same effect, as if incorporated in the same instrument. It was not a mode of doing business much to be approved ; but it was sufficient between honest men.

Whatever apparent contradiction there may be in the instruments taken together, it is manifest that the intention of the parties was, that the property should remain in the plaintiff, until he was paid the price. It was a conditional sale ; a contract for a sale, not consummated. But if it was to be regarded as a sale, it must be held that there was, at the same time, a mortgage back to secure the consideration. In the one ease, the property would not pass, except upon payment ; in the other, it would operate as a re-conveyance to the plaintiff, until he was paid his price.

Both modes of transacting the business, when free from fraud, have been sanctioned by judicial decisions, as appears by the cases cited for the plaintiff. The mortgage of personal property, the mortgagor remaining in possession, has been resisted as tending to give false credit, and to deceive purchasers ; but their validity has been too firmly established, to be shaken, without the interposition of the legislative power. And it has been held, in Lunt et al. v.

Whittaker, 1 Fairf 310, that a mortgage of this kind shall prevail against a bona fide purchaser, who had no notice of it, or reason to suspect its existence. Without resorting in this case to the parol evidence, which it is agreed exists, if admissible, we perceive no reason to doubt that the transaction was fair, and free from fraud on the part of the plaintiff. It does not appear, that he had any reason to suspect, that Washburn &f Fling would make the fraudulent use they did of the bill of sale he gave them.

It was a fraud upon him, as well as upon the purchaser, bringing into jeopardy the interest of both, and subjecting them to the hazard and expense of a lawsuit. But it is said the plaintiff ought to lose his horse; because by his bill of sale, lie enabled Washburn &f Fling to commit a fraud. This consequence could not have been meditated or designed by him. If he had even suspected it, a regard to his own interest would have withheld him from giving it.

It contributed to enable Wash-bum &f Fling to deceive a purchaser; and purchasers are often deceived by the evidence of property, arising from possession alone, without impairing the title of those, who may have entrusted the fraudulent party with such possession. As the law now is, the purchaser of personal property, is always exposed to tire incumbrance of a secret mortgage.

From the bill of sale, the purchaser had reason to believe, that the former owner of the horse had transferred his title ; but he would learn from the same paper that it was not paid for; and he ought to have known, that he incurred the hazard of a mortgage, made to secure him or some other person. If the sale had been made in the plaintiff’s presence, and he had been silent, he could not afterwards have asserted his claim against the purchaser.

Many cases, some of which have been cited, have turned upon the principle, that if one of two innocent parties is to suffer loss, by the fraud of a third, it shall fall upon him, who has reposed confidence in the fraudulent party, and enabled him to consummate the fraud. But this principle cannot apply to every case, which may fall within its range. A bailee may sell the property entrusted to him; but the purchaser thereby acquires no tide against the true owner.

The mortgagee, by suffering the mortgagor to keep possession, puts it in his power to. deftaud a subsequent purchaser, notwithstanding which, his mortgage is adjudged good. The plaintiff has proved property in the horse; either because he has not parted with his original title, or because he has acquired a new one by way of mortgage ; and there is no evidence that he has forfeited it, by fraud or otherwise. And the defendant having refused to give up the horse on demand, the opinion of the Court is, that the plaintiff is entitled to prevail in this action. Defendant defaulted.